UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
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| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2019
OR
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| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 000-19289
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| A. | Full title of the plan and address of the plan, if different from that of the issuer named below: |
State Auto Insurance Companies
Amended and Restated
Directors Deferred Compensation Plan
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| |
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
State Auto Financial Corporation
518 East Broad Street
Columbus, Ohio 43215-3976
REQUIRED INFORMATION
See the accompanying financial statements for the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
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| State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan |
| | |
| By: | | /s/ Steven E. English |
| | | Steven E. English |
| | | Senior Vice President, Chief Financial Officer |
| | | |
| By: | | /s/ Elise D. Spriggs |
| | | Elise D. Spriggs |
| | | Senior Vice President, Associate & External Relations |
Date: March 24, 2020
INDEX
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| Audited Financial Statements: | |
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Report of Independent Registered Public Accounting Firm
To the Plan Participants, Plan Administrator and Benefits Committee of
the State Auto Financial Corporation
Columbus, Ohio
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan (the Plan) as of December 31, 2019 and 2018, and the related statements of changes in net assets available for benefits for the years ended December 31, 2019, 2018 and 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019 and 2018, and the changes in net assets available for benefits for the years ended December 31, 2019, 2018 and 2017, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Plan’s auditor since December 31, 2010.
/s/ Clark, Schaefer, Hackett & Co.
Columbus, Ohio
March 24, 2020
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Statements of Net Assets Available for Benefits
|
| | | | | | | | |
| | | December 31 |
| | | 2019 | | 2018 |
| Assets | | | | |
Investments, at fair value: | | |
| | |
|
| Shares of registered investment companies (cost $9,539,150 and $8,112,353, respectively) | | $ | 11,236,444 |
| | $ | 8,317,260 |
|
| Interest-bearing cash | | 122,706 |
| | 1,423,166 |
|
| Affiliated stock (cost $1,398 and $1,722, respectively) | | 1,652 |
| | 2,223 |
|
| Total investments | | 11,360,802 |
| | 9,742,649 |
|
| | | | | |
| Net assets available for benefits | | $ | 11,360,802 |
| | $ | 9,742,649 |
|
See accompanying notes.
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Statements of Changes in Net Assets Available for Benefits
|
| | | | | | | | | | | | |
| | | Year Ended December 31 |
| | | 2019 | | 2018 | | 2017 |
Investment (loss) income: | | | | | | |
| Dividends | | $ | 344,677 |
| | $ | 350,903 |
| | $ | 329,300 |
|
| Unrealized gains (losses) | | 1,492,140 |
| | (1,081,148 | ) | | 886,273 |
|
| Realized gains | | 174,977 |
| | 376,682 |
| | 390,973 |
|
| Total investment income (loss) | | $ | 2,011,794 |
| | $ | (353,563 | ) | | $ | 1,606,546 |
|
| | | | | | | |
| Contributions: | | | | | | |
| Participant | | $ | 172,500 |
| | $ | 303,791 |
| | $ | 313,913 |
|
| Company | | 350,000 |
| | 310,000 |
| | 310,000 |
|
| Total contributions | | $ | 522,500 |
| | $ | 613,791 |
| | $ | 623,913 |
|
| | | | | | | |
Deductions: | | | | | | |
| Benefit payments | | $ | 916,141 |
| | $ | 744,633 |
| | $ | 573,046 |
|
| Total deductions | | $ | 916,141 |
| | $ | 744,633 |
| | $ | 573,046 |
|
| | | | | | | |
| Net increase (decrease) | | $ | 1,618,153 |
| | $ | (484,405 | ) | | $ | 1,657,413 |
|
| | | | | | | |
| Net assets available for benefits: | | | | | | |
| Beginning of year | | $ | 9,742,649 |
| | $ | 10,227,054 |
| | $ | 8,569,641 |
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| | | | | | | |
| End of year | | $ | 11,360,802 |
| | $ | 9,742,649 |
| | $ | 10,227,054 |
|
See accompanying notes.
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements
December 31, 2019
1. Description of the Plan
Organization
The State Auto Companies Amended and Restated Directors Deferred Compensation Plan (the “Plan”) became effective on August 1, 1995, was amended and restated in its entirety effective as of March 1, 2001, and was further amended effective as of December 1, 2005 (First Amendment), January 1, 2009 (Second and Third Amendments), November 1, 2010 (Fourth Amendment), and January 1, 2012 (Fifth Amendment). The Plan provides members of the Boards of Directors of State Automobile Mutual Insurance Company (“State Auto Mutual”) and its affiliates (collectively, the “Company” or the “State Auto Companies”) a retirement savings plan in which to defer the payment of director and committee meeting fees.
The benefits provided to participants under the Plan are paid from the Company’s general assets. The Plan is intended to be an unfunded Plan for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”) and is, therefore, exempt from certain ERISA requirements. Each participant’s right to benefits under the Plan are equivalent to the rights of any unsecured creditor of the Company.
Participants must enroll within 30 days after becoming eligible to participate. For subsequent years, participants must enroll prior to the beginning of each new plan year.
Contributions
Participants are permitted to defer on a pre-tax basis (a) a percentage of his or her director fees in the calendar year and/or (b) a percentage of committee meeting fees in the calendar year. In addition, for each of the members of the Board of Directors of State Auto Mutual, State Auto Mutual makes an annual cash contribution in the amount as determined at State Auto Mutual’s discretion. For the years ended December 31, 2019, 2018, and 2017, the discretionary contribution amounted to $70,000, $62,000 and $62,000, respectively.
Vesting
Each participant is fully vested in his or her contributions and any State Auto Mutual discretionary contributions.
Participant Accounts
Investment funds available under the Plan are merely devices used to calculate gains and losses on the amounts deferred by Plan participants. No participant has any rights or interests in any particular funds, securities or property of the Company or the trust described in Note 6, or in any investment vehicle in which deferrals are deemed to be invested, by virtue of any investment election. Each deferral account, however, is credited or charged in accordance with the Plan with gains and losses as if the participant in fact had made a corresponding actual investment. The Directors of State Auto Financial Corporation ("STFC") have the option to purchase STFC common stock ("Affiliated stock").
Payment of Benefits
The balance of each deferral account will be distributed upon retirement or termination of a participant from the Board of Directors of the Company. Payments will be made in cash and paid in 60 or 120 monthly installments, except for amounts deferred and fully vested prior to December 31, 2004, which can be distributed in alternative payment options as elected by the participant. The Company must receive at least 30 days written notice of the participant’s intention to retire and receive retirement benefits.
2. Significant Accounting Policies
Basis of Presentation
The accounting records of the Plan are maintained in conformity with U.S. generally accepted accounting principles ("GAAP").
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
Valuation of Investments and Related Investment (Loss) Income
The investments of the Plan consist of shares of registered investment companies, interest-bearing cash, and Affiliated stock. The Plan’s investments are stated at fair value. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. See Note 3 for discussion on fair value measurements.
Investment (loss) income, including appreciation and depreciation in fair value of investments, is allocated to participant accounts daily based upon the ratio of each participant’s account to the total fund balance. Dividend income is recorded on the ex-dividend date. Realized gains and losses on the sale of securities are determined based on the average cost method.
Benefit Payments
Benefit payments are recognized when paid.
Administrative Expenses
Administrative expenses are paid by the Company.
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the Plan’s statements of net assets available for benefits.
3. Fair Value Measurements
Below is the fair value hierarchy that categorizes into three levels the inputs to valuation techniques that are used to measure fair value:
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| • | Level 1 includes observable inputs which reflect quoted prices for identical assets or liabilities in active markets at the measurement date. |
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| • | Level 2 includes observable inputs for assets or liabilities other than quoted prices included in Level 1, and it includes valuation techniques which use prices for similar assets and liabilities. |
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| • | Level 3 includes unobservable inputs which reflect the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). |
The following is a description of the valuation methods used for assets measured at fair value:
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| • | Registered investment companies: Registered investment companies are public investment vehicles valued using net asset value (“NAV”) provided by the administrator of the mutual fund. The NAV is an unadjusted quoted price on an active market and is classified within Level 1 of the fair value hierarchy. |
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| • | Interest-bearing cash: The carrying value approximates fair value and is classified within Level 1 of the fair value hierarchy. |
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| • | Affiliated stock: The fair value is based on the unadjusted closing price reported on the active market on which the security is traded and is classified within Level 1 of the fair value hierarchy. |
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
The following tables reflect the Plan’s investments within the fair value hierarchy at December 31, 2019 and 2018:
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| | | | | | | | | | |
| 2019 | Total | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) |
| Registered investment companies | $ | 11,236,444 |
| $ | 11,236,444 |
| — |
| — |
|
| Interest-bearing cash | 122,706 |
| 122,706 |
| — |
| — |
|
| Affiliated stock | 1,652 |
| 1,652 |
| — |
| — |
|
| Total investments at fair value | $ | 11,360,802 |
| $ | 11,360,802 |
| — |
| — |
|
|
| | | | | | | | | | |
| 2018 | Total | Quoted prices in active markets for identical assets
(Level 1) | Significant
other observable
inputs
(Level 2) | Significant unobservable inputs
(Level 3) |
| Registered investment companies | $ | 8,317,260 |
| $ | 8,317,260 |
| — |
| — |
|
| Interest-bearing cash | 1,423,166 |
| 1,423,166 |
| — |
| — |
|
| Affiliated stock | 2,223 |
| 2,223 |
| — |
| — |
|
| Total investments at fair value | $ | 9,742,649 |
| $ | 9,742,649 |
| — |
| — |
|
4. Participant Accounts
Participant balances for all funds are maintained in shares. At December 31, 2019 and 2018, there were 19 and 18 participants, respectively, in the Plan, with contributions in one or more of the following funds. The total number of participants in the Plan is less than the sum of the number of participants set forth in the following table because each participant may make contributions to more than one fund.
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
The total number of shares and share values as of December 31, 2019 and 2018, by fund, were as follows:
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| | | | | | | | | | |
| 2019 | | | | | | |
| Investment Options: | | Total Number of Shares | | Net Asset Share Value | | Number of Participants |
| Registered investment companies: | | | | | | |
| ABF Small Cap Val Inst | | 311 |
| | $ | 24.33 |
| | 1 |
|
| FID 500 Index | | 5,793 |
| | 112.02 |
| | 4 |
|
| FID Contrafund K | | 115,332 |
| | 13.73 |
| | 6 |
|
| FID EXT Mkt IDX | | 831 |
| | 65.09 |
| | 7 |
|
| FID Total Bond | | 118,238 |
| | 10.91 |
| | 11 |
|
| Meridian Growth Inst | | 12,699 |
| | 38.76 |
| | 2 |
|
| MFS Value R6 | | 8,847 |
| | 44.41 |
| | 1 |
|
| MFS Inst Intl Equity | | 61,185 |
| | 27.86 |
| | 11 |
|
| TRP Blue Chip Growth | | 7,722 |
| | 124.35 |
| | 4 |
|
| VANG Inst TR 2015 | | 995 |
| | 22.99 |
| | 2 |
|
| VANG Inst TR 2020 | | 45,088 |
| | 24.11 |
| | 1 |
|
| VANG Inst TR 2025 | | 73,929 |
| | 24.73 |
| | 4 |
|
| VANG Inst TR 2035 | | 4,464 |
| | 25.50 |
| | 1 |
|
| VANG Inst TR Income | | 46,441 |
| | 22.62 |
| | 5 |
|
| Total registered investment companies | | 501,875 |
| | | | |
| Interest-bearing cash: | | | | | | |
| FID Govt MMRK PRM | | 122,706 |
| | 1.00 |
| | 3 |
|
| Total interest-bearing cash | | 122,706 |
| | | | |
| Affiliated stock: | | | | | | |
| State Auto Financial Corporation | | 53 |
| | 31.02 |
| | 1 |
|
| Total affiliated stock | | 53 |
| | | | |
| Total investments | | 624,634 |
| | | | |
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
|
| | | | | | | | | | |
| 2018 | | | | | | |
| Investment Options: | | Total Number of Shares | | Net Asset Share Value | | Number of Participants |
| Registered investment companies: | | | | | | |
| ABF Small Cap Val Inst | | 402 |
| | $ | 20.06 |
| | 1 |
|
| FID 500 Index Inst | | 6,025 |
| | 87.10 |
| | 4 |
|
| FID Contrafund K | | 118,815 |
| | 11.01 |
| | 6 |
|
| FID EXT Mkt IDX PR | | 1,569 |
| | 53.12 |
| | 7 |
|
| FID Total Bond | | 106,340 |
| | 10.24 |
| | 10 |
|
| Meridian Growth Inst | | 13,925 |
| | 33.14 |
| | 2 |
|
| MFS Value R6 | | 8,161 |
| | 35.30 |
| | 1 |
|
| MFS Inst Intl Equity | | 62,312 |
| | 22.39 |
| | 11 |
|
| TRP Blue Chip Growth | | 7,609 |
| | 96.03 |
| | 4 |
|
| VANG Inst TR 2015 | | 4,385 |
| | 20.64 |
| | 2 |
|
| VANG Inst TR 2020 | | 8,548 |
| | 21.03 |
| | 1 |
|
| VANG Inst TR 2025 | | 48,916 |
| | 21.17 |
| | 3 |
|
| VANG Inst TR Income | | 54,742 |
| | 20.51 |
| | 5 |
|
| Total registered investment companies | | 441,749 |
| | | | |
| Interest-bearing cash: | | | | | | |
| FID Govt MMRK PRM | | 1,423,166 |
| | 1.00 |
| | 3 |
|
| Total interest-bearing cash | | 1,423,166 |
| | | | |
| Affiliated stock: | | | | | | |
| State Auto Financial Corporation | | 65 |
| | 34.04 |
| | 1 |
|
| Total affiliated stock | | 65 |
| | | | |
| Total investments | | 1,864,980 |
| | | | |
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
5. Investments
The Plan’s investments and related changes at December 31, 2019, 2018 and 2017 and for the years then ended were as follows:
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| | | | | | | | | | | | | | | | | | | | |
| 2019 | Number of Shares | Fair Value | Dividends | Realized Gain | Unrealized Gain (Loss) | Contributions | Benefit Payments |
| Registered investment companies: | | | | | | | |
| ABF Small Cap Val Inst | 311 |
| $ | 7,575 |
| $ | 140 |
| $ | 81 |
| $ | 1,496 |
| $ | — |
| $ | (2,213 | ) |
| FID 500 Index | 5,793 |
| 648,800 |
| 13,596 |
| 1,851 |
| 146,200 |
| 11,900 |
| (49,536 | ) |
| FID Contrafund K | 115,332 |
| 1,583,502 |
| 64,597 |
| 35,755 |
| 284,456 |
| 11,900 |
| (121,357 | ) |
| FID Ext Mkt IDX | 831 |
| 54,107 |
| 2,906 |
| (1,922 | ) | 18,273 |
| — |
| (48,496 | ) |
| FID Total Bond | 118,238 |
| 1,289,976 |
| 36,618 |
| (883 | ) | 71,750 |
| 70,700 |
| (115,875 | ) |
| Meridian Growth Inst | 12,699 |
| 492,216 |
| 41,967 |
| 9,179 |
| 69,172 |
| — |
| (89,599 | ) |
| MFS Inst Intl Equity | 61,185 |
| 1,704,617 |
| 51,960 |
| 19,768 |
| 317,779 |
| 72,100 |
| (152,168 | ) |
| MFS Value R6 | 8,847 |
| 392,897 |
| 12,610 |
| — |
| 76,812 |
| 15,400 |
| — |
|
| TRP Blue Chip Growth | 7,722 |
| 960,211 |
| 3,490 |
| 91,942 |
| 118,396 |
| — |
| (85,380 | ) |
| VANG Inst TR 2015 | 995 |
| 22,881 |
| 698 |
| 6,005 |
| 6,251 |
| 70,000 |
| (11,836 | ) |
| VANG Inst TR 2020 | 45,088 |
| 1,087,067 |
| 28,154 |
| — |
| 63,906 |
| 65,250 |
| — |
|
| VANG Inst TR 2025 | 73,929 |
| 1,828,261 |
| 43,718 |
| 3,921 |
| 216,511 |
| 205,250 |
| (26,693 | ) |
| VANG Inst TR 2035 | 4,464 |
| 113,839 |
| 2,647 |
| — |
| 125 |
| — |
| — |
|
| VANG Inst TR Income | 46,441 |
| 1,050,495 |
| 28,241 |
| 9,194 |
| 101,266 |
| — |
| (210,958 | ) |
| Total registered investment companies | 501,875 |
| 11,236,444 |
| 331,342 |
| 174,891 |
| 1,492,393 |
| 522,500 |
| (914,111 | ) |
| Interest-bearing cash: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FID Govt MMRK PRM | 122,706 |
| 122,706 |
| 13,311 |
| — |
| — |
| — |
| (1,626 | ) |
| Total interest-bearing cash | 122,706 |
| 122,706 |
| 13,311 |
| — |
| — |
| — |
| (1,626 | ) |
| Affiliated stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| State Auto Financial Corporation | 53 |
| 1,652 |
| 24 |
| 86 |
| (253 | ) | — |
| (404 | ) |
| Total affiliated stock | 53 |
| 1,652 |
| 24 |
| 86 |
| (253 | ) | — |
| (404 | ) |
| Total assets held for investment | 624,634 |
| $ | 11,360,802 |
| $ | 344,677 |
| $ | 174,977 |
| $ | 1,492,140 |
| $ | 522,500 |
| $ | (916,141 | ) |
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
|
| | | | | | | | | | | | | | | | | | | | |
| 2018 | Number of Shares | Fair Value | Dividends | Realized Gain | Unrealized Gain (Loss) | Contributions | Benefit Payments |
| Registered investment companies: | | | | | | | |
| ABF Small Cap Val Inst | 402 |
| $ | 8,071 |
| $ | 1,075 |
| $ | 425 |
| $ | (2,970 | ) | $ | — |
| $ | (2,324 | ) |
| FID 500 Index | 6,025 |
| 524,785 |
| 5,888 |
| (806 | ) | (66,697 | ) | 4,271 |
| (11,044 | ) |
| FID 500 Index Inst | — |
| — |
| 8,372 |
| 134,835 |
| (105,605 | ) | 23,354 |
| (34,373 | ) |
| FID Contrafund K | 118,815 |
| 1,308,152 |
| 115,169 |
| 78,375 |
| (195,595 | ) | 36,375 |
| (102,201 | ) |
| FID Ext Mkt IDX PR | — |
| — |
| 121 |
| 22,741 |
| (15,484 | ) | — |
| (41,975 | ) |
| FID Ext Mkt IDX | 1,569 |
| 83,346 |
| 4,932 |
| (1,436 | ) | (17,621 | ) | — |
| (12,680 | ) |
| FID Total Bond | 106,340 |
| 1,088,920 |
| 29,462 |
| (5,446 | ) | (27,945 | ) | 86,625 |
| (127,362 | ) |
| Meridian Growth Inst | 13,925 |
| 461,491 |
| 65,978 |
| 16,123 |
| (111,619 | ) | — |
| (86,086 | ) |
| MFS Inst Intl Equity | 62,312 |
| 1,395,162 |
| 22,507 |
| 31,567 |
| (218,038 | ) | 107,375 |
| (111,472 | ) |
| MFS Value R6 | 8,161 |
| 288,075 |
| 10,400 |
| — |
| (41,949 | ) | 35,750 |
| — |
|
| TRP Blue Chip Growth | 7,609 |
| 730,684 |
| 17,505 |
| 62,775 |
| (23,340 | ) | 8,750 |
| (54,674 | ) |
| VANG Inst TR 2015 | 4,385 |
| 90,510 |
| 3,001 |
| 1,441 |
| (7,938 | ) | 61,357 |
| (19,760 | ) |
| VANG Inst TR 2020 | 8,548 |
| 179,756 |
| 4,578 |
| (2,675 | ) | (45,821 | ) | 58,638 |
| — |
|
| VANG Inst TR 2025 | 48,916 |
| 1,035,555 |
| 25,699 |
| 36,904 |
| (144,084 | ) | 129,387 |
| — |
|
| VANG Inst TR Income | 54,742 |
| 1,122,753 |
| 31,748 |
| 1,806 |
| (56,730 | ) | 61,929 |
| (137,497 | ) |
| Total registered investment companies | 441,749 |
| 8,317,260 |
| 346,435 |
| 376,629 |
| (1,081,436 | ) | 613,811 |
| (741,448 | ) |
| Interest-bearing cash: | | | | | | | |
| FID Govt MMRK PRM | 1,423,166 |
| 1,423,166 |
| 4,440 |
| — |
| — |
| (20 | ) | (2,811 | ) |
| Total interest-bearing cash | 1,423,166 |
| 1,423,166 |
| 4,440 |
| — |
| — |
| (20 | ) | (2,811 | ) |
| Affiliated stock: | | | | | | | |
| State Auto Financial Corporation | 65 |
| 2,223 |
| 28 |
| 53 |
| 288 |
| — |
| (374 | ) |
| Total affiliated stock | 65 |
| 2,223 |
| 28 |
| 53 |
| 288 |
| — |
| (374 | ) |
| Total assets held for investment | 1,864,980 |
| $ | 9,742,649 |
| $ | 350,903 |
| $ | 376,682 |
| $ | (1,081,148 | ) | $ | 613,791 |
| $ | (744,633 | ) |
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
|
| | | | | | | | | | | | | | | | | | | | |
| 2017 | Number of Shares | Fair Value | Dividends | Realized Gain | Unrealized Gain (Loss) | Contributions | Benefit Payments |
| Registered investment companies: | | | | | | | |
| ABF Small Cap Val Inst | 433 |
| $ | 11,865 |
| $ | 1,046 |
| $ | 445 |
| $ | (502 | ) | $ | — |
| $ | (1,975 | ) |
| FID 500 Index Inst | 6,063 |
| 566,588 |
| 14,053 |
| 23,666 |
| 76,816 |
| 30,468 |
| (14,758 | ) |
| FID Contrafund K | 12,780 |
| 1,564,104 |
| 91,758 |
| 18,536 |
| 243,065 |
| 128,001 |
| (60,759 | ) |
| FID Ext Mkt IDX PR | 2,333 |
| 144,748 |
| 8,320 |
| 3,449 |
| 14,216 |
| — |
| (48,032 | ) |
| FID Total Bond | 74,766 |
| 795,510 |
| 25,665 |
| (2,872 | ) | 13,637 |
| 32,558 |
| (198,828 | ) |
| Meridian Growth Inst | 13,869 |
| 577,089 |
| 38,552 |
| 4,627 |
| 64,819 |
| 6,000 |
| (31,262 | ) |
| MFS Inst Intl Equity | 67,290 |
| 1,713,213 |
| 31,218 |
| 4,129 |
| 320,063 |
| 82,460 |
| (62,966 | ) |
| MFS Value R6 | 6,999 |
| 283,873 |
| 12,654 |
| — |
| 27,836 |
| 34,230 |
| — |
|
| TRP Blue Chip Growth | 10,068 |
| 969,669 |
| 27,795 |
| 100,311 |
| 97,539 |
| 16,645 |
| (19,914 | ) |
| VANG Inst TR 2010 | — |
| — |
| 13,464 |
| 34,580 |
| 9,601 |
| 62,000 |
| (45,806 | ) |
| VANG Inst TR 2015 | 2,383 |
| 52,409 |
| 1,113 |
| 3,119 |
| 4,255 |
| 61,978 |
| (13,015 | ) |
| VANG Inst TR 2020 | 27,299 |
| 615,037 |
| 12,202 |
| 22,619 |
| 35,971 |
| 48,499 |
| — |
|
| VANG Inst TR 2025 | 65,076 |
| 1,487,649 |
| 29,102 |
| — |
| 169,577 |
| 121,074 |
| — |
|
| VANG Inst TR Income | 56,814 |
| 1,221,495 |
| 17,005 |
| 1,532 |
| 25,020 |
| — |
| (69,763 | ) |
| Total registered investment companies | 346,173 |
| 10,003,249 |
| 323,947 |
| 214,141 |
| 1,101,913 |
| 623,913 |
| (567,078 | ) |
| Interest-bearing cash: | | | | | | | |
| FID Govt MMRK PRM | 221,557 |
| 221,557 |
| 1,053 |
| — |
| — |
| — |
| (1,895 | ) |
| Total interest-bearing cash | 221,557 |
| 221,557 |
| 1,053 |
| — |
| — |
| — |
| (1,895 | ) |
| Affiliated stock: | | | | | | | |
| State Auto Financial Corporation | 77 |
| 2,248 |
| 4,300 |
| 176,832 |
| (215,640 | ) | — |
| (4,073 | ) |
| Total affiliated stock | 77 |
| 2,248 |
| 4,300 |
| 176,832 |
| (215,640 | ) | — |
| (4,073 | ) |
| Total assets held for investment | 567,807 |
| $ | 10,227,054 |
| $ | 329,300 |
| $ | 390,973 |
| $ | 886,273 |
| $ | 623,913 |
| $ | (573,046 | ) |
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
The Plan’s unrealized gain (loss) at December 31, 2019, 2018, and 2017, were as follows:
|
| | | | | | | | | |
| | | | Unrealized Gain (Loss) | | |
| | Beginning Balance | | Net Change | | Ending Balance |
| 2017 | $ | 400,283 |
| | 886,273 |
| | 1,286,556 |
|
| 2018 | $ | 1,286,556 |
| | (1,081,148 | ) | | 205,408 |
|
| 2019 | $ | 205,408 |
| | 1,492,140 |
| | 1,697,548 |
|
The Plan’s net realized gains and losses were as follows for the years ended December 31, 2019, 2018 and 2017:
|
| | | | | | | | | | | |
| 2019 | | | | | |
| Investment Options: | Aggregate Proceeds | | Cost | | Net Realized Gains |
| ABF SM CAP VAL INST | $ | 2,213 |
| | $ | 2,132 |
| | $ | 81 |
|
| FID 500 INDEX | 49,536 |
| | 47,685 |
| | 1,851 |
|
| FID CONTRAFUND K | 121,357 |
| | 85,602 |
| | 35,755 |
|
| FID EXTD MKT IDX | 48,496 |
| | 50,418 |
| | (1,922 | ) |
| FID GOVT MMRK PRM | 1,759,878 |
| | 1,759,878 |
| | — |
|
| FID TOTAL BOND | 115,875 |
| | 116,758 |
| | (883 | ) |
| MERIDIAN GROWTH INST | 89,599 |
| | 80,420 |
| | 9,179 |
|
| MFS INST INTL EQUITY | 152,168 |
| | 132,400 |
| | 19,768 |
|
| STATE AUTO FINANCIAL | 404 |
| | 318 |
| | 86 |
|
| TRP BLUE CHIP GRTH | 531,487 |
| | 439,545 |
| | 91,942 |
|
| VANG INST TR 2015 | 150,582 |
| | 144,577 |
| | 6,005 |
|
| VANG INST TR 2025 | 26,693 |
| | 22,772 |
| | 3,921 |
|
| VANG INST TR INCOME | 210,958 |
| | 201,764 |
| | 9,194 |
|
| Total | $ | 3,259,246 |
| | $ | 3,084,269 |
| | $ | 174,977 |
|
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
|
| | | | | | | | | | | |
| 2018 | | | | | |
| Investment Options: | Aggregate Proceeds | | Cost | | Net Realized Gains |
| ABF SM CAP VAL INST | $ | 2,324 |
| | $ | 1,899 |
| | $ | 425 |
|
| FID 500 INDEX | 11,044 |
| | 11,850 |
| | (806 | ) |
| FID 500 INDEX INST | 627,546 |
| | 492,711 |
| | 134,835 |
|
| FID CONTRAFUND K | 290,277 |
| | 211,902 |
| | 78,375 |
|
| FID EXT MKT IDX PR | 152,126 |
| | 129,385 |
| | 22,741 |
|
| FID EXTD MKT IDX | 12,680 |
| | 14,116 |
| | (1,436 | ) |
| FID GOVT MMRK PRM | 2,831 |
| | 2,831 |
| | — |
|
| FID TOTAL BOND | 127,362 |
| | 132,808 |
| | (5,446 | ) |
| MERIDIAN GROWTH INST | 86,086 |
| | 69,963 |
| | 16,123 |
|
| MFS INST INTL EQUITY | 261,472 |
| | 229,905 |
| | 31,567 |
|
| STATE AUTO FINANCIAL | 374 |
| | 321 |
| | 53 |
|
| TRP BLUE CHIP GRTH | 304,674 |
| | 241,899 |
| | 62,775 |
|
| VANG INST TR 2015 | 20,402 |
| | 18,961 |
| | 1,441 |
|
| VANG INST TR 2020 | 700,000 |
| | 702,675 |
| | (2,675 | ) |
| VANG INST TR 2025 | 500,000 |
| | 463,096 |
| | 36,904 |
|
| VANG INST TR INCOME | 137,567 |
| | 135,761 |
| | 1,806 |
|
| Total | $ | 3,236,765 |
| | $ | 2,860,083 |
| | $ | 376,682 |
|
|
| | | | | | | | | | | |
| 2017 | | | | | |
| Investment Options: | Aggregate Proceeds | | Cost | | Net Realized Gains |
| ABF SM CAP VAL INST | $ | 1,975 |
| | $ | 1,530 |
| | $ | 445 |
|
| FID 500 INDEX INST | 377,475 |
| | 353,809 |
| | 23,666 |
|
| FID CONTRAFUND K | 59,734 |
| | 41,198 |
| | 18,536 |
|
| FID EXT MKT IDX PR | 48,032 |
| | 44,583 |
| | 3,449 |
|
| FID GOVT MMRK PRM | 371,163 |
| | 371,163 |
| | — |
|
| FID TOTAL BOND | 198,821 |
| | 201,693 |
| | (2,872 | ) |
| MERIDIAN GROWTH INST | 31,262 |
| | 26,635 |
| | 4,627 |
|
| MFS INST INTL EQUITY | 62,718 |
| | 58,589 |
| | 4,129 |
|
| MFS VALUE R6 | (130 | ) | | (130 | ) | | — |
|
| STATE AUTO FINANCIAL | 538,708 |
| | 361,876 |
| | 176,832 |
|
| TRP BLUE CHIP GRTH | 424,200 |
| | 323,889 |
| | 100,311 |
|
| VANG INST TR 2010 | 1,163,480 |
| | 1,128,900 |
| | 34,580 |
|
| VANG INST TR 2015 | 77,339 |
| | 74,220 |
| | 3,119 |
|
| VANG INST TR 2020 | 299,939 |
| | 277,320 |
| | 22,619 |
|
| VANG INST TR 2025 | (111 | ) | | (111 | ) | | — |
|
| VANG INST TR INCOME | 69,763 |
| | 68,231 |
| | 1,532 |
|
| Total | $ | 3,724,368 |
| | $ | 3,333,395 |
| | $ | 390,973 |
|
STATE AUTO INSURANCE COMPANIES
AMENDED AND RESTATED DIRECTORS DEFERRED COMPENSATION PLAN
Notes to the Financial Statements (continued)
December 31, 2019
6. Trust
The Company maintains a trust to provide a source of funds to assist the Company in meeting its obligations under the Plan. The rights of participants and their beneficiaries under the Plan are merely unsecured contractual rights against the Company and its participating subsidiaries. Participants and beneficiaries have no preferred claim on, or any beneficial ownership interest in, any assets of the trust. All assets of the trust are subject to the claims of the general creditors of the Company and its participating subsidiaries under Federal and State law should the Company and its participating subsidiaries become unable to pay their debts as they become due or become subject to Federal bankruptcy proceedings.
7. Related Party
The Plan invests in shares of registered investment companies managed by Fidelity Management Trust Company, custodian of the Plan. Members of the Board of Directors of STFC may also invest in Affiliated stock.
8. Tax Status
The Plan is not, and is not intended to be, qualified under Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"). Consequently, an application for a favorable determination has not been filed with the Internal Revenue Service. The Plan does not have a tax filing requirement with the Internal Revenue Service, and therefore, no liability (or asset) or disclosure related to income taxes is included in the Plan’s financial statements.
Deferred amounts are subject to FICA and Medicare taxes and most local income taxes at the time of the deferral. Deferred amounts (and the earnings thereon) are not subject to Federal and most State income taxes until distributed from the Plan. Such distributions and the related taxes are the responsibility of the participants.
9. Right to Terminate
The Company may terminate the Plan at any time and for any reason. Following termination of the Plan, no additional deferrals may be made, but all existing participant accounts will continue to be administered in accordance with the Plan, unless the Company elects to accelerate distribution of all Plan accounts in accordance with Section 409A of the Code.
